In the world of investing, it’s a rare find to come across stocks that offer both robust growth and attractive dividends. Often, investors are forced to choose between one or the other. But what if you didn’t have to compromise?
It’s true that high-yield dividend stocks can sometimes be a red flag, signaling underlying issues. Similarly, ultra-fast-growing stocks often don’t pay dividends, focusing instead on reinvesting profits. However, amidst the vast sea of publicly traded companies, there are hidden gems that offer the best of both worlds: solid growth potential and rewarding dividends.
In this watchlist, we’ve done the legwork to uncover these unique opportunities. These aren’t your everyday stocks; they’re carefully selected to bring a balance to your portfolio that’s hard to find. Read on to discover the stocks that manage to strike this rare balance.
Phillips 66 (NYSE:PSX)
A key player in the hydrocarbon energy sector, Phillips 66 stands out for its focus on refining and marketing, along with a significant presence in storage and transportation. Despite the industry’s volatility, PSX has shown resilience, gaining over 15% in equity value since the start of the year.
In a world where geopolitical tensions are a constant, PSX emerges as a compelling pick for those seeking growth with high-yield dividends. The shift to electric vehicles is inevitable, but the current economic landscape suggests a continued demand for traditional energy sources, benefiting companies like Phillips 66. Financially, PSX impresses with a three-year revenue growth rate of 14.9%.
But it’s not just growth that makes PSX attractive. The stock offers a forward yield of 3.61%, placing it firmly in the high-yield dividend category. What’s more, its payout ratio of 31.13% indicates a sustainable dividend, making it a solid choice for investors looking for both growth and income.
Philip Morris (NYSE:PM)
Philip Morris might initially strike you as an unlikely candidate for a growth and high-yield dividend stock. In an era where global smoking rates are on the decline, it’s natural to question the growth prospects of a tobacco company. But there’s more to Philip Morris than meets the eye.
Contrary to initial impressions, Philip Morris is making strategic moves in the tobacco alternatives market, particularly in e-cigarettes and vaporizers. This pivot towards innovative products has proven to be a smart play. Despite missing total revenue estimates, the company has seen robust sales in its heated tobacco and oral nicotine products, which include heat-not-burn devices.
Financially, Philip Morris stands out with a forward yield of 5.66%, making it a noteworthy player in the realm of high-yield dividend stocks. For investors willing to navigate the risks associated with the tobacco industry, Philip Morris presents a unique blend of dividend income and potential growth, driven by its foray into alternative tobacco products.
Vici Properties (NYSE:VICI)
I’m going to be straight with you – VICI could be a topic of less favorable discussions down the line. However, its historical performance does make a compelling case for those interested in growth stocks.
According to Gurufocus, Vici’s three-year revenue growth rate is at 13.2%, surpassing 87.72% of its industry peers. Additionally, its forward earnings ratio of 11.96X suggests that the stock is undervalued. This might catch the eye of contrarian investors, especially considering its TTM revenue of $3.45 billion, significantly up from $2.6 billion in 2022.
The big question is whether Vici can sustain this growth momentum in the current economic climate. For risk-takers, the company offers an attractive forward yield of 5.81%, with a relatively moderate payout ratio of 62%. Analysts currently rate it as a strong buy, making VICI a potential candidate for those seeking high-yield dividend growth stocks.
